Written by Taco Heidinga, IQI Global Strategic Advisor 

As 2025 draws to a close, property investors are looking ahead to 2026 with cautious optimism. Shifting interest rate cycles, evolving demand patterns and structural supply constraints are shaping where capital is likely to flow next. 

Interest Rates, Affordability & Buyer Activity 

Several major economies, including the UK, are expected to see continued interest rate cuts into 2026. This should improve mortgage affordability and support a recovery in buyer activity, particularly among first-time buyers and home upgraders. Historically, lower borrowing costs have translated into higher transaction volumes and steadier price growth. 

Shift Toward Secondary & Emerging Cities 

Investor focus is increasingly moving beyond prime capital cities toward secondary and emerging urban centres. More affordable pricing, infrastructure upgrades and improved liveability are driving demand in commuter towns, satellite cities and lifestyle markets. Remote and hybrid work continues to reshape housing demand beyond traditional city cores. 

Sustainability & Smart Buildings 

Energy-efficient and green-certified buildings are gaining premium value. Buyers and tenants are prioritising lower operating costs, while governments are tightening environmental standards. Sustainability is rapidly shifting from a value-add to a baseline requirement for long-term asset performance. 

Inflation Hedge & Supply Constraints 

Real estate remains widely viewed as a hedge against inflation. At the same time, high construction costs and tighter credit conditions are restricting new supply in many markets, supporting price stability where demand remains resilient.